Multi-elemental bidding
The Trade Desk's multi-elemental bidding (MEB) and fractional compensation model rewards data providers whenever their data has a meaningful impact on a bidding decision, rather than only when an individual data segment wins. Because the total data cost for a won impression is shared proportionally across all contributing segments, providers receive more frequent payouts as advertisers add more segments to their campaigns.
Terms and definitions
The following table defines key terms used for MEB.
| Term | Definition |
|---|---|
| Multi-elemental bidding | The method by which The Trade Desk prioritizes bids on impressions where the most relevant data elements are present. When a campaign has multiple target segments, the bidder scores each available impression against all applicable segments and favors impressions where the highest-value, most relevant combination is present. |
| Fractional compensation | The pricing model that supports MEB. When multiple segments from one or more data providers collectively inform a bid on a won impression, each contributing provider receives a fractional payout proportional to their segment's relative value rather than a single provider receiving full credit. |
NOTE: MEB applies to data segment targeting. It governs how data costs are distributed when multiple audience segments inform a bid and is distinct from multi-dimensional bid lists, which apply bid factor adjustments based on combinations of inventory attributes like site and SSP.
Benefits
Under traditional fixed-CPM models, only one segment typically received credit per impression, even if multiple segments were active in the campaign. MEB changes this dynamic in the following ways:
- Every impression where a segment informs the bid generates revenue, not only impressions where that segment "wins" outright.
- Advertisers are less deterred from adding additional segments because total data cost scales gradually rather than multiplying across each segment.
- Higher relevance scores increase a segment's value share in the fractional payout calculation. For details, see Segment relevance and value score.
NOTE: MEB supports impressions matched through Unified IDs. Relevance scoring for UID-matched segments follows the same methodology as cookie-based segments, and providers who have integrated UID2 or EUID see fractional payouts on UID-enabled inventory in the same way as on other impression types.
How fractional compensation is calculated
All third-party data segment rates on The Trade Desk use Hybrid pricing: a combination of a percentage of media (POM) cost and a maximum CPM cap. When a bid wins and multiple segments contributed to the decision, The Trade Desk attributes a fraction of the data cost to each participating segment. The payout fraction is based on the relative value of each segment's contribution, where contribution is derived from the segment's relevance score for that impression.
The following image illustrates how MEB distributes the total data cost across providers proportionally by relevance-weighted value share. Ongoing improvements to the payout formula further increase the weight given to relevance. In this example, the three segments contribute with relevance-weighted shares of 30%, 46%, and 24% on an impression with a $0.67 CPM total data cost. Each respective provider receives $0.21, $0.32, and $0.17 CPM for that impression.
Segment relevance and value score
The Trade Desk derives a relevance score for each segment based on its historical performance across campaigns. This score is one of the key inputs into the fractional payout calculation: segments with higher relevance scores receive a larger share of the fractional data cost on impressions where multiple segments compete.
Data providers can improve the relevance of their segments over time by doing the following:
- Maintain accurate, high-quality audience membership (refresh (time-to-live) TTLs and segments regularly).
- Ensure segment descriptions and taxonomy paths are specific and well-defined, supporting accurate relevance scoring.
- Use the Third-Party Segments Dashboard to monitor compliance status, buyability, and segment details, and to update rates and access permissions directly.
FAQs
The following is a list of commonly asked questions about multi-elemental bidding.
Does a higher relevance score guarantee a larger payout?
No, not exactly. A higher relevance score increases a segment's share of the fractional data cost relative to other contributing segments, but the total payout also depends on how many segments contributed and the total data cost for that impression. A segment with a high relevance score competing against few others will generally earn more than the same segment competing against many high-scoring segments.
What happens if only one segment contributes to a bid?
Fractional compensation applies only when multiple segments inform a bid. If a single segment is the sole contributor, that provider receives the full data cost for the impression as normal.